A truce was declared Thursday in the two-year battle between the Equal Employment Opportunity Commission and Mitsubishi Motor Manufacturing of America Inc. as the carmaker agreed to pay a record $34 million to settle the biggest sexual-harassment case in U.S. history.
The consent decree, which has garnered union support but still requires court approval, marks the end of a confrontation that began April 9, 1996, when the EEOC filed a class-action suit alleging pervasive sexual harassment of hundreds of women at the firm’s auto-assembly plant in Normal, Ill.
The sheer scope of the case and the size of the settlement, which is triple the size of the next-highest settlement, were viewed Thursday as a resounding wake-up call to the nation’s employers.
“The $34 million is going to grab their attention,” said Joseph M. Milligan, a spokesman for the Illinois Manufacturers’ Association. “It’s one thing to write a policy and leave it on the shelf to collect dust, but what this settlement underscores is that it has to become a living, breathing thing.”
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EEOC Chairman Paul M. Igasaki said the settlement should prompt other employers to re-examine their policies and programs against sexual harassment.
“Whether you are dealing with the factory floor or boardroom suite, sexual harassment can occur unless the leadership team, from CEO to first-line supervisor, acts aggressively to ensure that the company’s culture prohibits sexual harassment,” Igasaki said.
While Mitsubishi did not admit to any wrongdoing in the formal agreement, it did acknowledge problems and offer a terse apology during a press conference in Chicago to announce the pact.
“There have been problems involving sexual harassment in our plant, which required correction,” said Kohei Ikuta, executive vice president. “We again extend our sincere regret to any woman who has been harmed.
“While we may have disagreed in the past with the EEOC on the extent of the problems and whether the company’s response went far enough, with today’s settlement, our disagreements with the EEOC end.”
The deal was brokered by Abner Mikva, a former White House counsel, federal appellate judge and local congressman who was appointed to the intermediary role by U.S. District Court Judge Joe Billy McDade, who is expected to issue a ruling on the proposed pact within weeks.
An estimated 350 women may be eligible for slices of the $34 million pie. By law, the individual settlements may not exceed $300,000.
Under the three-year decree, Mitsubishi also agreed to revise its sexual-harassment policy and complaint procedure to ensure “zero tolerance” of sexual harassment; to continue efforts to handle complaints within a month; and to provide mandatory training to employees about sexual harassment issues.
Even more significantly, it agreed to the appointment of a three-person panel of outsiders to oversee in-house efforts at the plant and to monitor handling of complaints.
The panel will be chaired by George F. Galland Jr., a lead plaintiffs’ attorney in a related civil case settled last year when Mitsubishi agreed to pay a reported $9.5 million to 27 alleged victims of harassment.
The other panel members will be former EEOC commissioner Joyce E. Tucker, who also was Illinois’ first director of human rights; and Nancy B. Kreiter, research director of Women Employed, a non-profit women’s advocacy group.
The case has drawn national attention because of the sensational nature of the alleged wrongdoing.
An EEOC court document released earlier described the plant, which employs 4,000, as “a workplace saturated with sexuality, most of it demeaning to women.”
Women at the plant were subjected to crude threats and forced to view pornography, including pictures from sex parties organized on company time, the federal agency had alleged.
Male employees would fire air guns and shoot water at the breasts and buttocks of female colleagues, the EEOC had alleged. As well, the government said supervisors would make “unwanted sexual advances with impunity” and routinely ignore complaints about abuse by others.
The consent degree does not rehash any of the allegations, and on Thursday, both the EEOC and Mitsubishi declined to discuss specific allegations.
“We entered the settlement to put the past behind us and look to the future,” said Walter B. Connolly Jr., outside counsel for Mitsubishi Motor Manufacturing of America, a unit of Mitsubishi Motor Corp., of Japan.
Earlier this year, Ford Motor Co. paid about $1.5 million to settle a lawsuit that charged widespread sexual harassment and racial discrimination took place at its stamping plant in south suburban Chicago Heights.
But the problem is not confined to the auto industry, and it is thought the sheer size of the Mitsubishi case settlement will help keep a sharp corporate focus overall on workplace sexual harassment issues.
“Any settlement of this magnitude just serves as another wake-up call to human resources managers and executives,” said Gerald D. Skoning, a partner at Seyfarth Shaw Fairweather & Geraldson, a law firm that represents management in labor matters.
“Unless they have their heads thoroughly buried in the sand, employers are very attuned to protecting themselves,” he said.
“In America, money talks, and when boards of directors of other companies see what Mitsubishi has to pay out because of alleged sexual harassment, they’re going to say, `Clean up this company, get your act together, this is going to cost us money.’ ” said Lorna Brett, president of the Chicago chapter of the National Organization for Women.
And it’s not only the money that will make companies uncomfortable. The use of outside overseers, an increasingly popular tool in settlements, is not something most companies would welcome.
“Very few employers want a group of former plaintiffs’ representatives looking over their shoulders as to what they are doing,” said Skoning.
The broad scope of the case is significant, as well.
“One of the most important aspects of this case is that it clearly demonstrates that harassment can be pervasive, but that it can be addressed in a wholesale way,” said Marcia Greenberger, co-president of the National Women’s Law Center, a non-profit advocacy group based in Washington, D.C.
“The ability to use the law to remedy this pervasive situation for everyone at one time is a very important development,” she said.
While nobody is pooh-poohing the size of the settlement, it is not out of this world, Skoning said.
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It amounts to about 32 percent of what 350 potential claimants could gain if they won the maximum award in individual court cases, he noted.
And certainly it pales in comparison to some other class-action settlements in the related arenas of sex and race discrimination.
Among the most notable, according to Skoning: $250 million in a State Farm sex-discrimination case; $176 million in the Texaco race-discrimination case; $133 million in the Shoney’s race-discrimination case.
When asked how the $34 million settlement would affect the bottom line of the plant in Normal, Mitsubishi’s Ikuta said: “Our sales numbers are significant. We are building more than 200,000 cars in a year. We can handle it.”
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